Executive Summary
The published financial statements provide the stakeholders with a narrow insight into the financial strengths and weaknesses of a business. Therefore, it is necessary to carry out comprehensive financial analysis. The paper carried an evaluation of the financial performance of Petrobras. The 2012 annual report shows that the total assets of the company increased from $319,914 million in 2011 to $331,645 million in 2012.
The non-current assets make up a significant proportion of the total assets while on the liability and equity side, the value of total equity is slightly higher than the total liabilities. From the income statement, the amount of sales revenues decreased from $145,915 million in 2011 to $144,103 million in 2012. Similarly, the net income declined from $19,992 million in 2011 to $10,931 million in 2012 (SAC Petrobras 2014b).
Based on the ratio analysis carried out, the profitability declined over the two-year period. Further, there was no significant change in the liquidity position. The gearing level increased over the period. Also, the operating efficiency of the company declined during the same period. Finally, the valuation ratios also declined between 2011 and 2012. Therefore, there was an overall decline in the financial position of the company.
Introduction
Petroleo Brasileiro SA commonly known as Petrobras is a multinational company that operates in the oil and gas industry. Specifically, the company deals with “exploration and production, refining, marketing, transportation, petrochemicals, oil production, distribution, natural gas, electricity, chemical gas, and biofuels” (SAC Petrobras 2014).
The company was established in 1953 and it is based in Brazil. It is the industry leader in the Brazilian oil industry and it aspires to be among the top five in the integrated energy companies worldwide. Petrobras is a publicly held company that trade in four stock markets under different ticker symbol.
These are, the BM&F Bovespa in Brazil, New York Stock Exchange in the US, Bolsa de Madrid in Spain, and Bolsa de Comercio de Buenos Aires Stock Exchange in Argentina (SAC Petrobras 2014a). The total number of shareholders of the company as at the end of the financial year 2012 was 573,201. The major shareholder is the government of Brazil.
The total investment of the company is worth R$84 billion. The net revenue earned by the company in 2012 amounted to R$281 billion, while the net profit amounted to R$21 billion. The total number of employees engaged by the company as at the end of 2012 totaled to 85,065 people. Some of the competitors of the company are Exxon Mobil Corporation, Royal Dutch Shell PLC, Chevron Corporation, BP PLC, and Total SA among others (NASDAQ.com 2014; Morningstar, Inc. 2014; ABC News Network 2014).
The company has access to about fifteen refineries. The total daily yield of these refineries amounts to 2,249,000 barrels of spin-offs. The daily production of the company stands at 2,598,300 barrels per day. 472,300 barrels related to daily production of natural gas while the remainder relate to production of oil. Further, the total reserve of the company is approximately 16.4 billion barrels of the equivalent of oil and gas.
Also, it has 80 fixed and 55 floating production platforms. Petrobras has a presence in over 25 countries across the world with a total of 8,507 service stations (SAC Petrobras 2014a). Further, the company has three fertilizer plants, four wind energy plants, nineteen thermo-electric plants, and seven biofuel plants. Finally, the company has about 39 subsidiaries across the world (SAC Petrobras 2014a). This paper seeks to carry out financial analysis of Petrobras.
Conclusion
In conclusion, the overall performance of the company in the current period declined when compared with the performance reported in the previous period.
References
ABC News Network 2014, Petroleo Brasileiro S. A. – competitors. Web.
NASDAQ 2014, Petroleo Brasileiro S. A. – Petrobras competitors. Web.
Morningstar, Inc. 2014, Petroleo Brasileiro S. A. – Petrobras ADR. Web.
SAC Petrobras 2014, About us. Web.
SAC Petrobras 2014, Financial results. Web.